Tips For Avoiding Bankruptcy
While bankruptcy is a last resort solution that can provide individuals and families with debt relief, making the right choices can help you or your family prevent from running into money management problems. As a bankruptcy lawyer like one from The Law Offices Of Ronald I. Chorches can explain, maintaining positive habits can help you keep a healthy credit score. Whenever possible, you want to do everything you can to not go through the bankruptcy process. Follow these tips to ensure that you stay in good financial health.
Make Payments On Time
Knowing when your payments are due is essential. When you make payments on time, you are building a positive credit history, which can improve your chances of being able to get a loan that you want at an interest rate that is not too high. Late payments can signal to lenders that you are not a reliable person and cannot be trusted to successfully pay off your loan. Set your payment reminders a few days before your deadline so that you have enough wiggle room if you ever forget a payment.
Limit Your Credit Card Use
One way to avoid bankruptcy is to keep a close eye on your credit card spending. Even if you have a high credit limit, you don’t want to spend more than 30% of it. Opening too many credit cards may cause you to overspend on items that you don’t really need as well. Try reducing your credit cards to one or two that you can use for building credit and essential items.
Check Your Credit Report Frequently
Keeping a habit of checking your credit report periodically can help you spot suspicious activity right away. If you are able to report unusual activity that you see on your bank statements early, you can avoid becoming a victim of fraud. Experian, TransUnion and Equifax offer annual credit reports that you can request at no cost.
Downsize Your Home
Consider downsizing your house if you are struggling to maintain your lifestyle. If your family has a large house and is struggling to pay your mortgage, moving to a smaller home may provide you with home relief. With a smaller house, you can cut down on utility costs and other expenses so that you can increase your disposable income. Not to mention the money you may have in equity after selling the home.
Making small but tough choices for your family can help you to improve your financial situation if you are struggling with debt or money management. For more guidance on how you can solve your financial issues, reach out to a skilled bankruptcy lawyer now.